Fixed income - canada

[bandito]

Hi all,

I just moved some idle money from a USD account to my cad account to take advantage of the currency difference. I was wondering if anyone had recommendations for investments that are pretty much guaranteed. Aspects I would like to consider:

Tsfa/rrsp eligible
No load
High rate of return (yield and mer)
Best for the present market

Thanks

[Heckler]

Vancouver real estate.

[Koogie]

Hi all,

I just moved some idle money from a USD account to my cad account to take advantage of the currency difference. I was wondering if anyone had recommendations for investments that are pretty much guaranteed. Aspects I would like to consider:

Tsfa/rrsp eligible
No load
High rate of return (yield and mer)
Best for the present market

Thanks

If you've got the stomach for it, bank stocks are on a mild sale right now.   National Bank paying over 6% in dividends, Scotiabank and CIBC over 5.    That kicks the stuffing out any fixed income you're going to buy.    But, you've got to be ready to hold on to those stocks for a long time so it can't be money you'll need in the short term.

[bandito]

Thanks for all the replies.

I was looking for something more short term. I have put some of the money into a bond mutual fund from TD bank which averages  4% -5% annually.  I was looking to do something with the rest along the same lines.  I have never invested in bonds, t-bills, gics, ect.  and therefore have no experience hence why I asked the original question. I am already invested in real estate with other money but have never invested in stocks that pay dividends. This is more money that I have in trading accounts that is going to stay there until I retire.  The accounts themselves don't really pay much interest hence why I would like to park it somewhere more profitable and that enables the cash to be readily available. Maybe A more precise question I should have asked it who as a recommendation for a reliable source to research this sort of investment style.

Thanks again

[daverobev]

Thanks for all the replies.

I was looking for something more short term. I have put some of the money into a bond mutual fund from TD bank which averages  4% -5% annually.  I was looking to do something with the rest along the same lines.  I have never invested in bonds, t-bills, gics, ect.  and therefore have no experience hence why I asked the original question. I am already invested in real estate with other money but have never invested in stocks that pay dividends. This is more money that I have in trading accounts that is going to stay there until I retire.  The accounts themselves don't really pay much interest hence why I would like to park it somewhere more profitable and that enables the cash to be readily available. Maybe A more precise question I should have asked it who as a recommendation for a reliable source to research this sort of investment style.

Thanks again

You need to check that fund - it may be a large chunk is return of capital. I would be wary of "investing" in bonds for the short term; there is no such thing as short term investing.

Your list of requirements (high yield, short term, safe) generally do not go together. I would suggest looking at EQ Bank - 3% at the moment; vs the big banks' 1.x% interest.

There is no 'best for the present market'; the general, and good, advice is to find your asset allocation, invest to meet it, and rebalance infrequently/when your allocation gets out of whack.

[cloudsail]

Following. We're coming into an inheritance in Canadian dollars in the near future and I don't know what to do with it. Obviously can't convert to US$ at this point. Don't know when Canadian $ will go up again. Don't want it just sitting in the bank losing money. Not sure I want to lock it up in real estate (and it's not really enough to buy anything in Vancouver, which is the only Canadian city I'm familiar with).

[daverobev]

Following. We're coming into an inheritance in Canadian dollars in the near future and I don't know what to do with it. Obviously can't convert to US$ at this point. Don't know when Canadian $ will go up again. Don't want it just sitting in the bank losing money. Not sure I want to lock it up in real estate (and it's not really enough to buy anything in Vancouver, which is the only Canadian city I'm familiar with).

You might see 1CAD:0.5USD before you see parity again. If you need to, transfer the money; 0.7 US IS what CAD is worth at the moment, there is nothing special about parity - it is not 'right'.

I mean.. if I had no need for the money, I'd be buying Canadian stock (VCN, ZCN, or whatever).

If you do need the money, check out EQ Bank. Seriously, 3% is the absolute best rate at the moment, and it is CDIC insured (up to $100k, I believe per account).

If you want monthly income, check ZPR, ZDV, etc.

[cloudsail]

Following. We're coming into an inheritance in Canadian dollars in the near future and I don't know what to do with it. Obviously can't convert to US$ at this point. Don't know when Canadian $ will go up again. Don't want it just sitting in the bank losing money. Not sure I want to lock it up in real estate (and it's not really enough to buy anything in Vancouver, which is the only Canadian city I'm familiar with).

You might see 1CAD:0.5USD before you see parity again. If you need to, transfer the money; 0.7 US IS what CAD is worth at the moment, there is nothing special about parity - it is not 'right'.

I mean.. if I had no need for the money, I'd be buying Canadian stock (VCN, ZCN, or whatever).

If you do need the money, check out EQ Bank. Seriously, 3% is the absolute best rate at the moment, and it is CDIC insured (up to $100k, I believe per account).

If you want monthly income, check ZPR, ZDV, etc.

Thanks so much for the recommendations! I'd never heard of EQ Bank. 3% sounds great, wish I had that for my emergency cash in the US. Too bad it's only insured up to $100k though.

We don't need the money, but if exchange rates do go up I'd like to convert it to US$, since I think it's unlikely that we'll move to Canada anytime in the next few decades. Though I guess if I see good C$ investments I don't mind diversifying our portfolio a bit.

Anyway it's not a pressing issue at the moment. We might not see the money for another 6 to 12 months.

[daverobev]

The EQ bank thing is new (they aren't a new bank, but this is a brand new offering).

Who knows what CAD/USD will do in the next year. There has to be some inflation soon, so I would imagine the BoC will raise rates in the next year or two. I mean, there IS inflation now, except oil dropping has counteracted most of it. But oil can't drop much lower, and the effect of oil dropping is diminished vs the other costs of buying refined fuel at the pump even if it does drop more.